Insurers coming back for Obamacare

Feds say Pennsylvania will have 15 issuers for Obamacare in 2015, up from 14 this year.

Feds say Pennsylvania will have 15 issuers for Obamacare in 2015, up from 14 this year. (ANDREW HARNER/BLOOMBURG / Bloomberg)

Of The Morning Call

Who is the latest PA insurance co to join Obamacare?

As the Affordable Care Act prepared to launch in 2013, one of the big unknowns was how insurance companies would take to the new marketplace: Would they embrace the opportunity to insure a group of largely uninsured working people, or would they avoid the risks of the unknown?

One year into the new marketplace, insurance companies are undeniably embracing the health-care law.

Pennsylvania, which had robust competition among for-profit and nonprofit insurers for its first year, will add four issuers and lose three for a net gain of one additional insurer, according to a preliminary report from the U.S. Department of Health and Human Services. That preliminarily gives the state 15 insurance companies offering plans in Pennsylvania's marketplace and makes it likely that competition will remain brisk and keep prices affordable.

The news from HHS was positive on a national scale as well. For the 44 states on which the federal government has data, it said there will be a 25 percent increase in the number of issuers participating in the state marketplaces created by the act.

The federal report does not indicate which firms are in and which are out.

A spokeswoman at the Pennsylvania Insurance Department said officials also do not know which insurers are on HHS' preliminary list for the state.

In addition, the report does not indicate how the competition will look in Pennsylvania's nine insurance rating areas. The non-partisan Kaiser Family Foundation in general looks for at least three insurance companies in each marketplace to ensure healthy competition to keep prices in line.

An HHS report from June said there was a correlation between healthy marketplace competition and lower costs. Adding one issuer in an area, it said, resulted in a 4 percent decline, on average, on the premium of the silver plan, which is the second lowest in cost.

HHS say that the law — which some said would bring higher rates and fewer issuers — is working.

"When consumers have more choices, we all benefit," HHS Secretary Sylvia M. Burwell said. "In terms of affordability, access and quality, today's news is very encouraging."

The report looked at preliminary data for the states such as Pennsylvania that allowed the federal government to run its Affordable Care Act marketplace, as well as eight states that chose to run their own. It found that while some states had no change in the number of issuers, only one, California, will have fewer, going from 12 to 10.

Some of the states where political opposition was strongest to the health-care law are seeing the greatest increase in competition, according to the preliminary federal data. Texas will would go from 12 insurance providers to 16; Missouri will double from four to eight; and New Hampshire, which only had one this year, will have five in 2015, it says.

Opponents were unimpressed.

"This isn't exactly news to be celebrating," said James Paul, senior policy analyst at the free-market-supporting Commonwealth Foundation in Harrisburg. "Many of the insurers have to offer essentially the same product thanks to the extensive mandates in the law."

Paul said consumers would be better served if the federal government removed coverage requirements and allowed them to choose what they want in their health-care coverage.